IWI Code of Professional Responsibility Flashcards
Preamble to the Code of Professional Responsibility
Purpose Mission Values 1. Integrity 2. Loyalty 3. Objectivity 4. Ethical Conduct
Institute Code of Professional Responsibility
- Act in the best interest of the client.
- Disclose services to be offered and provided, related charges, and compensation.
- Disclose the existence of actual, potential, and/or perceived conflicts of interest and relevant financial relationships, direct and/or indirect. Take appropriate action to resolve or manage any such conflicts.
- Provide clients information needed to make informed decisions.
- Respond to client inquiries and instructions appropriately, promptly, completely, and truthfully.
- Maintain confidentiality of client information, however acquired, consistent with legal and regulatory requirements and firm policies.
- Provide competent service by truthful representation of competency, maintenance and/or development of professional capabilities, and, when appropriate, the recommendation of other professionals.
- Comply with legal and regulatory requirements related to one’s practice of his or her profession.
- Maintain a high level of ethical conduct.
Code of Professional Responsibility: 3. Conflicts of interest
- “Actual, potential, and/or perceived conflicts of interest” must be disclosed
- “Relevant financial relationships, direct or indirect” must be disclosed
- A “financial relationship” means any arrangement or transaction related to the purchase and/or sale of goods and/or services between a third party and the Institute professional.
- “Direct” financial relationships are those paid for by a client.
- “Indirect” financial relationships are those for which the Institute professional receives some form of compensation but that is not paid directly by the client. ——Only “relevant” financial arrangements need to be disclosed under Principle 3, and “relevant” in this context means material to or having an effect on a client’s decision to undertake the transaction and/or engage the Institute professional.
Code of Professional Responsibility: 5. Respond to inquiries and instructions
Under Principle 5, “respond” means to provide or refuse to provide (for good reason), orally or in writing, information sought by client inquiries and/or to take or refuse to take action (for good reason) in accordance with a client instruction.
Code of Professional Responsibility: 6. Maintain confidentiality
Highlight box: The Institute professional should be aware of the identity of his or her client because client information may not be shared with non clients, even if such non clients are family members, partners, associates, spouses, advisors, lawyers, or accountants. Client information may be shared with non clients if the client has authorized the Institute professional to divulge such information to a specifically authorized person. Under best practices, oral authorizations should be confirmed or otherwise memorialized in writing as soon as possible after the authorization is given.
Code of Professional Responsibility: 9. Ethical conduct
Principle 9 requires more than technical compliance with rules and regulations. An Institute professional shall not only abide by all applicable laws and regulations, including, among other things, those of Institute, but the Institute professional also shall not engage in activities that call into question his or her “ethical” behavior.
Examples of unethical behavior may include, but are not limited to:
• Acts resulting in conviction of a felony;
• Acts resulting in conviction of a misdemeanor involving moral turpitude (e.g., lying, cheating, stealing) or violence;
• Conduct that is damaging to the public or any member of the public; and
• Conduct that compromises the integrity of the Institute, any of the Institute’s marks, or the financial services profession.
“Disclose”
“Disclose” means to provide information orally or in writing.
“Client”
The meaning of “client” depends upon the Institute professional’s role and duties. In general, the “client” is the person with whom the Institute professional interacts. The role of some Institute professionals is to provide investment and/or wealth management consulting or advice for pension funds, endowments, families, individuals, or other asset owners. Any such persons to or for whom consulting or advisory services are provided is regarded as a “client.”
“Serious Crime”
Serious Crime — (1) any felony; (2) any lesser crime, a necessary element of which as determined by its statutory or common law definition involves misrepresentation, fraud, extortion, misappropriation, or theft; and/or (3) an attempt or conspiracy to commit such crime, or solicitation of another to commit such crime.
Professional Review Board
The Institute has established a PRB to review, investigate, and rule on violations of the Code, Rules, and/or other standards
Grounds for Discipline
a. Violation of the Code, Rules, or other standards
b. Violation of federal or state rule or rules of self-regulating bodies in respect to the financial services industry;
c. Violation of the criminal statutes of any state or the United States for commission of a Serious Crime.
d. Any act or omission that results in the suspension or termination of a professional license, designation, or certification by a local, state, federal, or private licensing, designation or certification authority or organization;
e. Violation of the rules of FINRA or other financial services self-regulatory organization;
f. Failure to respond to a disciplinary petition or a request of the Hearing Panel, PRB, the Institute Appeals Board, and/or the Institute staff or failure to comply with an order of a Hearing Panel, the PRB, and/or the Institute Appeals Board;
g. The submission of false or misleading statements to the Institute, a Hearing Panel, the PRB, and/or the Institute Appeals Board; and
h. Violation of the License Agreement between the Institute and the Licensee.
Initiation of Disciplinary Proceedings
If the Institute is notified in writing of a complaint against a Licensee or Candidate, the Institute staff shall have sixty (60) days from that date to research the complaint.
- Within the sixty (60) day period, the Institute staff may prepare and send a draft petition or other recommendation to Legal Counsel for review and approval.
- Legal Counsel shall have sixty (60) days to review the petition or other recommendation and determine if IM the Institute CA staff should forward the petition to the PRB for initial review.
Professional Review Board (PRB) initial review
Any of these time periods may be extended by the PRB upon good cause shown.
The PRB shall undertake an initial review of each disciplinary petition or other recommendation forwarded by the Institute staff.
-The PRB has sixty (60) days from receipt of the petition or other recommendation to make its determination.
If the PRB finds a disciplinary petition or other recommendation establishes good cause for discipline, it shall either: (a) in the event the PRB determines that the petition and supporting exhibits establish, without any reasonable grounds for dispute, that grounds for discipline exist and that the appropriate remedy is a
private censure, then the PRB may authorize the issuance of a private letter informing the Respondent of these conclusions and that a private censure would be the remedy.
Hearing panel
The Respondent shall be offered the opportunity to have a hearing in lieu of the summary private censure; or (b) appoint a three-member Hearing Panel to hear and review evidence with respect to the petition or other recommendation. No member of the PRB or the Institute Board of Directors or Appeals Board may serve on a
Hearing Panel.
Hearing panel timing
a. An answer to the disciplinary petition shall be filed with the Institute staff no later than thirty (30) days after the mailing date of the disciplinary petition to Respondent.
b. During the period beginning thirty (30) days after the mailing date of the disciplinary petition to Respondent and ending ninety (90) days thereafter, the Hearing Panel may request that the Respondent produce documents concerning the alleged infraction and any facts, claims, or defenses asserted in the answer.
c. The hearing date shall be set no later than ninety (90) days after the last day of the Document Production Period.
testimony presented shall be under oath. Within sixty (60) days of the last day of the hearing, the Hearing Panel shall issue a report of its findings of fact and conclusions recommended to the PRB. The PRB shall review the Hearing Panel’s report and proposed order and issue a final order within thirty (30) days after receiving the report and proposed order. The PRB’s final order shall be sent to Respondent by certified mail within ten (10) business days of issuance.